http://trn.trains.com/news/news-wire/2015/04/minnesota-taconite-plants-reduce-production
Watch my videos on-line at https://www.youtube.com/user/AndrewNeilFalconer
It's just a cycle and probably not too much to worry about. There will always be an ebb and flow to freight for a thousand different reasons that have nothing to do with Limbaugh, the Democrats or Donald Trump. People just aren't buying as much stuff, so shipping volumes reflect that fact. Personally, I'm enjoying the slower pace...spending more time at home and with family knowing that by Spring we'll most likely be going flat out once again.
CMStPnP n012944 CSX's CEO: 'We're in a freight recession” http://www.bizjournals.com/jacksonville/news/2016/01/13/csxs-ceo-were-in-a-freight-recession.html?ana=yahoo He is an idiot.
n012944 CSX's CEO: 'We're in a freight recession” http://www.bizjournals.com/jacksonville/news/2016/01/13/csxs-ceo-were-in-a-freight-recession.html?ana=yahoo
He is an idiot.
Lol. Somehow I think he has just a little bit of a better grasp as to what is going on in the transportation world than you do.....
An "expensive model collector"
tpatrick I am told that NS has furloughed many if not all of last years new hires. Their prospects of reemployment are not good. Does anyone know of the situation at other railroads?
I am told that NS has furloughed many if not all of last years new hires. Their prospects of reemployment are not good. Does anyone know of the situation at other railroads?
Bad just about every where on most class 1s. How many years of service for cut off people depends on where you are. A few places have people with 10+ years furloughed.
Jeff
Pretty sure that neither Hannity nor Limbaugh are referenced as sources in any of the following:
http://www.chicagotribune.com/business/ct-walmart-closing-stores-20160115-story.html
http://www.grandforksherald.com/news/business/3913512-bnsf-lay-nearly-100-employees
Not to mention hundreds of others said to be getting laid off/furloughed elsewhere across the system, including a large number of dispatchers in Ft. Worth.
http://mtstandard.com/news/local/montana-rail-link-furloughs-jobs-in-yellowstone-county-including-eight/article_3a95dabb-7c08-5567-9f7a-f6b28b6297ef.html
https://mises.org/library/auto-loan-bubble-ready-pop
And you thought all those recent auto purchases were a positive sign.
http://www.bloomberg.com/news/articles/2016-01-03/blame-it-on-oil-2016-an-unhappy-new-year-for-asian-shipbuilders
http://www.ft.com/intl/cms/s/0/c9c465de-ba0e-11e5-bf7e-8a339b6f2164.html#axzz3xKIB9rht
http://www.nytimes.com/2016/01/06/upshot/lost-jobs-houses-savings-even-insured-often-face-crushing-medical-debt.html?_r=0
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/12094866/BP-to-cut-4000-jobs-in-exploration-and-production-as-oil-price-bites.html
http://www.marinelink.com/news/imports-resurge-highest403466.aspx
Hence the hard times in the CBR sector, save for steady numbers still rolling toward PNW terminals, and Canadian crude resuming its flow toward California.
http://www.seattletimes.com/business/loonies-dive-spurs-us-imports-of-used-cars-to-13-year-high/
http://www.theglobeandmail.com/report-on-business/economy/housing/with-a-resource-slump-can-canadas-other-industries-power-the-economy/article28092680/
http://www.cbc.ca/news/business/macquarie-loonie-forecast-1.3401644
That bit about the CDN dollar vs. U.S. dollar bears watching. As America's largest trading partner, what happens north of the border has significant impact south of the border. An economist speaking on yesterday morning's Eye Opener program on the CBC broadcast out of Calgary said that many Canadians are cancelling plans for vacations in the U.S. because of their weaker dollar, and that weaker dollar is making Canadian lumber and other goods much more competitive in the U.S. Just in the past three or four months, there's been a spike in the number of U.S. lumber and paper mills announcing plans to cut back on production or close down altogether. Fewer tourists coming south and fewer goods moving north equates to a growing loss for American businesses. Not complaining; just citing fact. It's a global trend, not just here in North America.
https://www.youtube.com/watch?v=9cQgQIMlwWw
jeffhergert tpatrick I am told that NS has furloughed many if not all of last years new hires. Their prospects of reemployment are not good. Does anyone know of the situation at other railroads? Bad just about every where on most class 1s. How many years of service for cut off people depends on where you are. A few places have people with 10+ years furloughed. Jeff
CSX has about 2K furloughed and 300 engines stored.
Never too old to have a happy childhood!
Guys, read financial posts and things of the like. This slow down has very little to do with post Christmas anything. We're heading for the bottom and about to drill deeper.
10000 feet and no dynamics? Today is going to be a good day ...
I wasn't talking politics at all. I see now with all these comments what you mean reading it just today. By four years ago I meant that it was a fair amount of time to see where the "ship" was being pointed and listen.. I'm just a dumb railroader, but I took economics junior year, and politics aside its not a business friendly or encouraging environment is all I was insinuating. Chill out man.
Bruce KellyThat bit about the CDN dollar vs. U.S. dollar bears watching. As America's largest trading partner, what happens north of the border has significant impact south of the border. An economist speaking on yesterday morning's Eye Opener program on the CBC broadcast out of Calgary said that many Canadians are cancelling plans for vacations in the U.S. because of their weaker dollar, and that weaker dollar is making Canadian lumber and other goods much more competitive in the U.S. Just in the past three or four months, there's been a spike in the number of U.S. lumber and paper mills announcing plans to cut back on production or close down altogether. Fewer tourists coming south and fewer goods moving north equates to a growing loss for American businesses. Not complaining; just citing fact. It's a global trend, not just here in North America.
Except that Mexico is about to replace Canada as our second largest trading partner, Mexico is just slightly behind Canada now and might surpass it in the next few years with it's double digit increases in trade year over year. Trade with Mexico declined slighly in 2015 though. What is interesting with trade with Mexico is over the last decade slowly our exports are increasing to match imports ........I think there was only a 53 Billion difference last year. So that is a positive trend as well and hope it continues.
Walmart is closing 269 stores but plans to open 240 more new ones. To me that is a market repositioning, otherwise they would halt the store openings. Some of the store closings have to do with pilot stores and concept stores that they want to now reign in.
CMStPnPWalmart is closing 269 stores but plans to open 240 more new ones. To me that is a market repositioning, otherwise they would halt the store openings. Some of the store closings have to do with pilot stores and concept stores that they want to now reign in.
269 internationally. Only 154 were in the US; 102 of that were its failed "Express" format stores. It will open as many as 405 new stores.
C&NW, CA&E, MILW, CGW and IC fan
The Bloomberg link Bruce Kelly posted is telling combined with news that orders at China's shipyards are down 60%.
The brightest spot in the US economy over the last few years was the use of advanced horizontal drilling with hydraulic fracturing for gas and oil. For the RR's, one obvious source of revenue was CBR, but the hauling of frac sand and well casing was nohing to sneeze at either. Drilling is way down due to the drop in oil prices, and that's having an effect on areas that make materials used in drilling as well as the oil patch.
Curious to see WTI selling for a slight premium over Brent now, where there were times during the Bakken boom where WTI was selling for more thatn $5 discount to Brent. A simple explanation is that pressure to lower the price is coming from overseas and the slight premium reflects the transportation costs to the Midwest.
Another factor is the Chinese economy is looking like it is doing somewhat of a repeat of the US economy in 2007-2008.
With unexpected time on my hands I've taken to re-reading some of our histories. For as long as there has been railroading we have had ups and downs in business. Ironically, a decade ago it was believed that the railroads had grown so large via mergers with traffic bases so diverse that we would never feel the sting of a downturn again. Hopefully we know better now. Even so, this lull in traffic is nothing like ebbs of the past; dividends are still being paid, capitol improvements are still planned and budgeted, maintenance is yet to be deferred. This is nothing like what I grew up with.
As for the politics of business, it is really quite simple: When times are good all sides are quick to take credit, when things go south all sides are even quicker to blame the policies of other guy. Again, same as it ever was...
Editor Emeritus, This Week at Amtrak
Further on crude oil and coal trains. Crude-By-Rail was essentially a product of a single large oil field, the Bakken of ND, developing fast in an area with few pipelines. More pipelines have been built. Production is only off 4% since its high of a year ago, so if CBR is down more than that, the crude has gone to pipelines.
Utility coal has been partly replaced by natural gas and renewables. Total electric generation is essentially unchanged.
You must look at all modes of transportation, including pipeline, truck and inland waterways, before making economic predictions.
MidlandMike Further on crude oil and coal trains. Crude-By-Rail was essentially a product of a single large oil field, the Bakken of ND, developing fast in an area with few pipelines. More pipelines have been built. Production is only off 4% since its high of a year ago, so if CBR is down more than that, the crude has gone to pipelines. Utility coal has been partly replaced by natural gas and renewables. Total electric generation is essentially unchanged. You must look at all modes of transportation, including pipeline, truck and inland waterways, before making economic predictions.
Looking at the numbers in Railway age comparing the latest month availabe to the previous year, it's what's down that makes me think a recession is coming. It's not the coal and petroleum numbers that makes me think that, I expected them to be way down. It's that the basic materials used by industry are way down.
Maybe it's an anomaly. Maybe last year's numbers were inflated over the norms for some reason, but I don't think so.
I read on another forum a post from a BNSF guy. He said they have 5000 furloughed system wide.
jeffhergert MidlandMike Further on crude oil and coal trains. Crude-By-Rail was essentially a product of a single large oil field, the Bakken of ND, developing fast in an area with few pipelines. More pipelines have been built. Production is only off 4% since its high of a year ago, so if CBR is down more than that, the crude has gone to pipelines. Utility coal has been partly replaced by natural gas and renewables. Total electric generation is essentially unchanged. You must look at all modes of transportation, including pipeline, truck and inland waterways, before making economic predictions. Looking at the numbers in Railway age comparing the latest month availabe to the previous year, it's what's down that makes me think a recession is coming. It's not the coal and petroleum numbers that makes me think that, I expected them to be way down. It's that the basic materials used by industry are way down. Maybe it's an anomaly. Maybe last year's numbers were inflated over the norms for some reason, but I don't think so. I read on another forum a post from a BNSF guy. He said they have 5000 furloughed system wide. Jeff
Yes a number of basic materials are down. I know Iron ore is down (by total of all methods of shipment). A significant amount goes to China, whose economy seems to be slowing down considerably.
In the top post, I should have stated my last paragraph in the form of a question. Are all the modes (including pipeline, truck and inland waterways) suffering traffic loss?
It's too obvious. Railroads ship mostly raw and bulk materials. Low demand for tar sand oil, coal from Wyoming, lumber for construction, concrete and asphalt for roads and materials for manufacturing. We have been in a recession for at least a year. The travel industry is starving. Under-employment is rampant. No stimulus in sight while Europe and Asia are in complete decline. A world-wide collapse is the fear of many.
http://www.investors.com/railroad-recession-may-point-to-economic-pullback/
“It’s hard to speak to whether there is recession,” CEO Lance Fritz said on a conference call. “Certainly our volume drop-off is dramatic.”
MidlandMike Yes a number of basic materials are down. I know Iron ore is down (by total of all methods of shipment). A significant amount goes to China, whose economy seems to be slowing down considerably.
No US mined Iron Ore goes to China, a small amount goes to Canada(Essar Steel in Sault ste. Marie, ON). Australian and Brazilian producers have the Chinese market.
beaulieu MidlandMike Yes a number of basic materials are down. I know Iron ore is down (by total of all methods of shipment). A significant amount goes to China, whose economy seems to be slowing down considerably. No US mined Iron Ore goes to China, a small amount goes to Canada(Essar Steel in Sault ste. Marie, ON). Australian and Brazilian producers have the Chinese market.
I see now that the Utah iron mine exporting to China, shut down about a year ago. USGS stats (2014, latest) show that about a quarter of US iron ore production (13 of 57 million tons per year) is exported, which is more than just "a small amount".
23 17 46 11
What I find particularly entertaining is that with all the talk of reduced traffic volume, we no longer hear from those in 2007 who were bemoaning that the Dakota, Minnesota, and Eastern was denied their multi-billion-dollar loan to build into the Powder River Basin, even though there was no justification for doing so even before the current decline in coal traffic. What a fiasco that would have been had construction actually started.
Along the same lines, those who touted the rebuilding of the Milwaukee Road Pacific Extension as a cure for the congestion in North Dakota due to crude oil business on BNSF have also been eerily silent as of late.
Not that either proposal had any validity regardless of traffic volume, but interesting nonetheless.....
Mark Meyer
edblysard Don't really see a slow down or drop off in traffic down here, in fact, we recalled all they guys we had on furlough, and are discussing starting a new class of switchmen. Our member lines are bringing bigger trains, even the TexMex has double the car count on deliveries, and are here every day, instead of every other day like normal. Could the drop simply be a media reaction to a few Wall Street reports? Well, Phillips is running 24/7, Dow and Solvay and Lubrizol is blowing and going, Shell is cranking out coke and oil products like there is no tomorrow...
Glad to hear of your local prosperity. But the last (I believe) Class 1 has reported, and all of them are down on volume, altho everyone still seems able to jack up prices.
The ports have been busy.. maybe because all the stuff that's NOT being made here for consumption is brought in from overseas. My port freight is way up.. domestic shipper freight way down.
dakotafred edblysard Don't really see a slow down or drop off in traffic down here, in fact, we recalled all they guys we had on furlough, and are discussing starting a new class of switchmen. Our member lines are bringing bigger trains, even the TexMex has double the car count on deliveries, and are here every day, instead of every other day like normal. Could the drop simply be a media reaction to a few Wall Street reports? Well, Phillips is running 24/7, Dow and Solvay and Lubrizol is blowing and going, Shell is cranking out coke and oil products like there is no tomorrow...
"No soup for you!" - Yev Kassem (from Seinfeld)
It appears that the U.S. economy is on a slowing trend with the 4th quarter GDP at a growth rate of .7%
Low fuel prices is one factor. In the past with increase in such prices, shippes move to rail from rubber and this cycle is the reverse w/ so many single car shipments now off rail to trucks. BNSF coal is down 36% from this time last yr and is the biggest fator is reduction of the work force. Pools & extra boards have been cut deep going back to 2010 senority dates. Just this past wk, the carrier has announced a silly buyout offer for qualified train service workers but what is being put out on the table amounts to just three months of wages. This is an indication that the industry is in for a long downhill cycle that likely will take time to dig out of
The major railroads are now serving customers in more efficient, long unit trains.
More of the less frequent rail customers are now having goods delived by tractor-trailer.
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